Between our income tax, national insurance, VAT, council tax and more, the typical British worker pays around half of their income in tax. Corporations aren’t asked to pay quite so much – with the UK corporation tax currently sitting at 19% of profits, less than a fifth of their takings.

But lots of companies find legal ways to pay even less – and Caffe Nero has become the latest to attract public criticism for this as it emerged it has paid no corporation tax in a decade, despite making sales of more than £2bn over the period. Despite that not breaking any existing rules, it has led some to call for rules to be changed, or for the coffee shop to change its ways.

Some of the ways companies lower their tax bill are quite straightforward, done through rules which mean if you lose money one year, you can pay less tax on your profit the next year.

But other ways are more sophisticated: international companies trading in the UK may pay money to overseas parts of their group in lower tax countries as a branding fee, or franchise fee. Others loan money from their parent company – usually owned in an offshore haven – at high interest rates, meaning the repayments wipe out UK profits, reducing the tax bill. Others do still more complicated steps to reduce their bills.

So, how much tax do some of the UK’s biggest coffee stops pay, and where can you drop in for morning caffeine if you care about companies paying their bills?

Caffe Nero

Caffe Nero paid no corporation tax in 2017 – or for years beforehand, but on the face of it this seems reasonable: rather than make a profit, they made a loss of more than £20 million. However, as professor of accounting Prem Sikka noted the company had loans from other companies in its group which charge a huge rate of interest, of more than 20% – despite commercial loans being available at much lower rates. This led him to conclude “profits ha[ve] effectively been shifted from the UK to Luxembourg via a loan deal and has reduced or wiped out the UK tax bill”.

Pret A Manger

Pret A Manger, unlike Caffe Nero, has paid some UK tax in its last accounts – which despite being called “Pret A Manger (Europe) Limited” cover its UK sales, on which it made more than £80 million of profit. However, the company did manage to reduce its tax bill somewhat by claiming “group relief”, which allows it to offset losses in other parts of its owners’ business against Pret’s tax bill, reducing it from around £17 million in theory to just over £5m in practice.

Starbucks

Starbucks has been criticised multiple times for taking steps – within the law – to reduce its UK tax bill, including paying licensing fees to overseas companies. However, after a series of stories on its practices, the company made the voluntary decision to stop these practices, and even pledged in 2012 to deliberately overpay UK tax, voluntarily offering to pay the treasury more corporation tax than was legally due for two years.

The company doesn’t split out its UK revenues versus what it makes from the rest of Europe, but in 2016 made $188 million from sales across Europe – with the UK as its biggest market – and paid just under $4 million in UK corporation tax, giving it an effective tax rate of less than 4%.

However, a representative for Starbucks said the company had restructured its European operations last year, and across the group of companies paid £6.7 million in tax on its UK operations. The company said it has also shifted the legal domicile of its European headquarters to the UK, leading to a further payment of around $22 million in tax.

Costa Coffee

Costa Coffee, which has operated in the UK since the 1970s, is now part of a bigger corporate group which also owns Premier Inn, Beefeater and some other high street names. However, its accounts for its coffee business show the company makes sizeable UK profits – and pays its tax on them.

Due to some adjustments, the company in 2017 actually paid slightly more than the headline tax rate of 20%, and its accounts reveal the company also paid an effective tax rate of more than 20% in previous years, too.

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